Vat on services rendered from abroad and registration obligations in colombia

Those who provide services from abroad to residents in Colombia, as a general rule, will have the legal obligation to register with the Colombian tax authority as “service providers from abroad”, in addition to charging and collecting VAT on B2C (Business to Consumer) operations.

Despite the fact that services provided from abroad are generally taxed with VAT at the general rate of 19%, this since the modification that law 1819 of 2016 introduced on this tax, it was not until the issuance of resolution 051 of 2018 of the DIAN, that the procedure to follow to register as a service provider was established, in addition to the periodicity and form in which the returns must be submitted.

It is also worth taking into account that Law 1943 of 2018 and subsequently Law 2010 of 2019 introduced a modification to numeral 8 of Article 437-2 of the Colombian Tax Statute, regarding the manner in which VAT should be collected. The previous regulation established that the collection of the tax on electronic or digital services should be made by the issuer of the credit or debit card; while the recent amendments establish this system as something optional and voluntary for the supplier. 

Thus, some of the services for which withholding at the source by third parties used to be automatically practiced, and for which non-resident suppliers are now required to register and file a tax return with the Colombian Tax Administration, are as follows:

  • Audiovisual services (music, videos, movies and games of any kind).
  • Services provided through digital platforms
  • Online advertising services.
  • Distance learning or training services
  • The rights of use or exploitation of intangibles.
  • And other electronic or digital services to users located in Colombia.

Giovanni Tellez
Legal Advisor

Ecovis Colombia S.A.S.